5 Year- End Tax Planning Tips in Newburgh, NY
- Author John Childs
- Published September 8, 2010
- Word count 501
Year-end tax planning is very important especially if you want to organize your budget and tax for your small business. Here are 5 year-end tax planning tips that can pay big dividends for this year.
- Defer Income
If you are able to defer your income such as bonuses until next year, this year you might be able to pay lower income taxes. If you have a company, any payments your company can receive during the first week of January cuts your tax bill. Depending on your income tax rates in the projected coming year, deferral of income can be the best strategy for many sole proprietors, partnerships, and S corporations. Just make sure your cash flow can handle the deferred income.
- Buy equipment and supplies
This is the perfect time to invest in your business and save taxes as well. If you can see a
need for supplies and services in the first quarter of the coming year, buy them now, if your cash flow permits. Consider these items for expenses: office supplies, equipment purchases, pay bills early and other items like repairs and maintenance. Business tax law can be intricate so it is a smart move to first call your accountant before you make large purchases.
- Charitable Contributions
If you are planning to make charitable contributions do it before the end of the year to receive a deduction. Donate valued property such as real estate instead of the proceeds of the sale and if you plan to transfer appreciated property, begin early because it will take weeks and sometimes month to make the change. Some say doing this for tax deduction is heartless but I say contrary. If you pay less in taxes because of a well-planned ideas, your will be doing better financially and able to give more in the future. Ensure you get a receipt for the tax deduction.
- Investment Losses
Do you have investment that has depreciated in value and is worth less than when you
originally purchased it? Consider selling it. You may be able to use that loss to compensate for capital gains. But be reminded that investment decisions should not be made just for tax purposes. Make sure that you really need to sell that investment.
- Contribute to a Retirement Plan
To reduce your income for this year make payments to your retirement plan or set one up
before the year-end. Pay the maximum acceptable to employer-sponsored defined
contribution retirement plans. This not only gives a superb tax deduction, it also helps you to plan for your future retirement as well. You may also want to contribute to an IRA; if you did not participate in a company-sponsored retirement plan or if your income falls below certain levels up to $2,000 is fully deductible.
Every business owner has different situation and accounting method so these year-end tax tips may not be applicable to all. Take the time to analyze the best strategy with a professional accountant and maximize the year-end tax planning for your small business.
Visit http://www.newburghaccountant.com to learn how to find a great accountant in Newburgh, NY. Free guide has tips on how to choose an accountant, preparing your taxes..do it yourself or hire a pro, 5 year end tax planning tips, Selling securities at year end...don't get caught by the wash sale rule, proper ways to deduct home office expenses
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